Opportunity Lost: The Economic Benefit of retaining Foreign-Born Students in Local Economies

Report Author:

Giovanni Peri, Gaetano Basso, and Sara McElmurry

Original Date of Publication:

2016 Apr

This study measures the likelihood that three categories of foreign-born individuals (F-1 visa holders, lawful permanent residents, and undocumented individuals) will be employed five years after graduating from college. Described by the authors as the "first-of-its-kind quantification of college-to-employment rates," the study devotes special attention to the growing numbers of foreign students, i.e. F-1 visa holders -- two-thirds of whom are studying in high-demand STEM fields. As the U.S. continues to attract students from around the world (the number of F-1 visas issued annually has increased five-fold from 2001 to 2014), the ability of the U.S. to retain these students as entrepreneurs and contributing members of American society has not kept pace. Indeed, the authors found that for every 100 F-1 students educated in a state or metro area, none were working in that state or locality five years later. The authors provide estimates as to the wages and state tax revenue lost as a result of this waste of human resources. Finally, the report reviews stalled legislation introduced in Congress to address this problem, and offers a number of policy recommendations, including the establishment of a provisional visa for STEM college graduates with a job offer from a U.S.-based employer, and creating work permits with geographical restrictions to enable regions where students were educated to benefit from the education provided by local institutions. (Diversity Dynamics)